Global wheat production is projected to decline by 23 million tonnes in the 2026-27 season (September-August), according to the International Grains Council (IGC). As reported by The Hindu BusinessLine, farmers in North America, the European Union, the UK and Australia are either switching to other crops or reducing acreage amid El Niño-induced weather risks and higher input costs linked to the Iran conflict. The US Department of Agriculture (USDA) has also forecast lower global production, citing smaller crops in the US and Canada, while higher output in Russia and Ukraine is expected to partly offset the decline. However, the war in Ukraine continues to significantly impact wheat production and exports, with Russia pulling out of deals to allow millions of tons of Ukrainian grain to be exported.
The European Commission has significantly revised its 2026-27 production forecasts, with soft wheat production cut to 124.4 million tonnes, down from 126.3 million tonnes projected a month earlier and around 8% lower than the previous season. According to Kedia Advisory, grain maize production was slashed to 51.9 million tonnes from 59.9 million tonnes, now expected to be nearly 14% below last year's output. The Commission also reduced barley production estimates to 51.05 million tonnes from 51.7 million tonnes, compared with 55.6 million tonnes harvested last season. Sunflower seed production was revised down to 9.5 million tonnes from 10.1 million tonnes, though it remains above last year's 8.7 million tonnes.
According to the IGC forecast, global wheat production is expected to reach 821 million tonnes in 2026-27, down from 844 million tonnes this season. Consumption is projected to rise to 828 million tonnes from 822 million tonnes, while global trade is forecast to decline to 205 million tonnes from 216 million tonnes. As a result, ending stocks are forecast to fall to 279 million tonnes from 285 million tonnes. The USDA expects global wheat output to decline 3% year-on-year, while demand will continue to grow on higher food, seed and industrial use. The European Commission has reduced soft wheat exports to 29 million tonnes and projected lower ending stocks at 12.9 million tonnes, reflecting tighter availability across the region.
Wheat futures on the Chicago Board of Trade (CBOT) are currently trading at $6.39-1/4 a bushel, down 24-1/4 cents from the previous session's surge to $6.86-1/2 a bushel. The USDA has pegged the US season-average farm price at $6 a bushel ($220.46 a tonne). Analysts noted that US wheat acreage has fallen to its lowest level in nearly a century, underscoring tightening global supplies. These supply-side risks are likely to provide a floor to global wheat prices, limiting the scope for any significant decline in the near term. However, recent market corrections are beginning to emerge, with Matif futures contracts falling by more than 6% since last week, down 15 euros per metric ton to 229.3 euros per metric ton for November delivery.
Geopolitical tensions are adding to supply concerns, with the Ukraine war continuing to disrupt exports from Russia and Ukraine, while the Iran conflict has affected shipments of fertiliser raw materials from the Persian Gulf. According to The Hindu BusinessLine, El Niño is expected to weigh further on production later this year, with its full impact likely to be felt in next year's harvests. Weather conditions are also affecting production, with heat and dry conditions beginning to affect the northern US Plains, while the situation is more severe in France, Germany, Belgium and the UK. Analysts attribute the decline in grain maize production to sharply reduced planting, rising energy and fertilizer costs, and multiple heatwaves that disrupted crop development across major producing regions.
